(08-02-2019, 08:32 AM)mikesez Wrote:

(08-02-2019, 07:42 AM)jagibelieve Wrote: Try again.

Nah.  Tell me what I'm missing, then tell me why what I'm missing matters to someone with $1 million or less in assets who only moves his assets once or twice a year...

An ETF is a group of stocks much like a mutual fund that is traded like a stock.  The asset allocation isn't set by a "stock exchange".  Most if not all are professionally managed.  Also, while there are some ETFs designed to track a particular index (NYSE, NASDAQ, etc.) there are numerous others with different goals.

A good example is ITA, an ETF that I bought when President Trump was elected that is made up of companies in the Aerospace and Defense Industry.  It is professionally managed and has nothing to do with "tracking the overall market".  It has done very well for me though lately it has struggled with the problems that Boeing has been going through lately (Boeing makes up roughly 20% of the holdings).  Even with the recent struggles, between the price that I bought it at and the price that it trades for now as well as the dividends that it has paid I have make close to 1 year's salary on just that one investment.

Another ETA that I have held for a long time is DVY.  Again it is professionally managed and is made up of stocks that tend to pay good dividends.  This one is different in that the price usually stays relatively flat (though it has grown some since I initially purchased it).  Once again it has nothing to do with tracking a market index.

The biggest difference between a mutual fund and an ETF is the way that they are traded.  I could pull the trigger right now and either buy or sell an ETF and it would be effective immediately.  Most mutual funds are bought and sold at the price they are at at the market close rather than when you issue the buy/sell order.  Also, there are usually fees and rules as far as buying or selling mutual funds as far as how long you have to hold it.  Not so much with an ETF.

A REIT is probably beyond you as well.

As far as why it would matter to anyone regardless of the amount of assets they have invested, I guess it really doesn't... except for those like me who choose to manage their own money.  While you only move money once or twice a year I move money on more-or-less a monthly basis depending on what I'm doing.  I personally invest primarily in ETFs, REITs and bonds with a few individual stocks every now and then.  It's certainly not for everyone and requires some time and effort.  It doesn't matter if you are investing $1000.00 or several hundred thousands or even millions of dollars.

Finally, I am by no means a professional.  If I am wrong or off in my description I welcome a professional like Predator to correct me.

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